Govt. mulls GST hike for farmers’ welfare fund

Govt. mulls GST hike for farmers’ welfare fund

News:

1. GoM proposes to rise 1% GST as an alternative to sugar cess that had proposed earlier.

Important facts:

2. Rise in GST will helps to finance farmers welfare fund.

3. The states can use the amount to to fulfill the needs of all farmers as against the sugar cess that will help only sugarcane famers.

4. The decision came when several states, namely kerala shows its reservation towards sugar cess.

5. Imposing a cess is against the basic principle of GST

6. Under the proposed hike of GST rates, additional revenue will be shared between the Centre and States.

7. Out of the proposed 1% raise, 0.5 will be used by the Center and the rest by the states.

8. A Group of Ministers (GoM) also considered reduction in the GST on ethanol and increasing the government subsidy for export of sugar.

9. The proposed GST cut on ethanol is 18%to 5%.

10. Government is also planning to increase the export subsidy to sugar to make its price competitive in international market.